Water rights purchased by a city would be considered a capital asset.

Name: Water rights purchased by a city would be considered a capital asset.
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As discussed in Chapter five, water rights purchased by the city would be considered an intangible asset, which is a capital asset that does not have physical existence. If such assets are separable from the government, which is the case for water rights, the assets are accounted for like any other capital assets.

Water Rights Purchased by a City Would Be Considered a Capital